Sparkling Co. produces facial and skincare products. The R&D department has developed two potential new products: one is a new organic chemical compound that aids in the production of collagen, and the other is a plant-based cream that is highly effective in reducing wrinkles. The products are similar enough to be produced on existing equipment, but the company would not be able to produce both of them. Sparkling projects the following revenue and cost information for each of the products:
What would be the net difference in income of producing the cream instead of the compound?

Question

Sparkling Co. produces facial and skincare products. The R&D department has developed two potential new products: one is a new organic chemical compound that aids in the production of collagen, and the other is a plant-based cream that is highly effective in reducing wrinkles. The products are similar enough to be produced on existing equipment, but the company would not be able to produce both of them. Sparkling projects the following revenue and cost information for each of the products:
   What would be the net difference in income of producing the cream instead of the compound?

Quizplus · Accepted Answer

The Answer of Sparkling Co. produces facial and skincare products. The R&D department has developed two potential new products: one is a new organic chemical compound that aids in the production of collagen, and the other is a plant-based cream that is highly effective in reducing wrinkles. The products are similar enough to be produced on existing equipment, but the company would not be able to produce both of them. Sparkling projects the following revenue and cost information for each of the products:
   What would be the net difference in income of producing the cream instead of the compound?